Interpleader Protects All Claimants Against Life Policy and the Insurer
Who’s on First to Get Life Insurance Proceeds
Post 5184
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Interpleader Protects All Claimants Against Life Policy and the Insurer
In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview
This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).
Key Points
Plaintiff-in-Interpleader’s Application:
The Plaintiff-in-Interpleader filed an amended application for leave to deposit funds into the Court registry. This application was granted by the Court.
Funds Deposit:
The Plaintiff-in-Interpleader is required to deposit a check payable to the Clerk of the United States District Court for the Eastern District of California in the amount of $10,159.99 plus any applicable interest into an interest-bearing account in the Court Registry.
Purpose of Interpleader:
The interpleader action aims to resolve the issue of multiple claims to the remaining life insurance benefits of the Decedent, Neal Sanchez. The Plaintiff-in-Interpleader seeks to deposit the funds to relieve itself from responsibility while the Court determines the rightful beneficiaries.
Beneficiary Designations:
There is an unresolved issue regarding whether the Decedent intended to change his beneficiary designations for his life insurance benefits due to technical malfunctions in the benefits system. This has led to uncertainty about the distribution of the remaining Plan benefits.
Legal Analysis
The Plaintiff-in-Interpleader seeks to deposit the funds to relieve itself from responsibility while the Court determines the rightful beneficiaries. The interpleader action is brought pursuant to Federal Rule of Civil Procedure 22 and 28 U.S.C. § 1335, which permit a party to file an interpleader claim when the party faces possible exposure to multiple liabilities from the defendants. The core purpose of Rule 67 is to relieve a party who holds a contested fund from responsibility for disbursement of that fund among those claiming some entitlement thereto. The decision to allow the deposit of property pursuant to Rule 67 is discretionary.
Beneficiary Designations
There is a significant issue regarding the Decedent’s beneficiary designations. The Decedent’s beneficiary designation form for the Plan dated March 5, 2014, designates four Defendants-in-Interpleader as equal beneficiaries of 25% each. However, due to a technical error in the benefits system, it is unknown if the Decedent intended to make the same beneficiary designation changes to his life insurance as his 401(k). This has led to the Plaintiff-in-Interpleader being unable to determine the rightful beneficiaries without risking exposure to multiple claims and liabilities.
Court’s Findings
The Court found that the deposit of the remaining life insurance benefits into an interest-bearing account is appropriate and granted the Plaintiff-in-Interpleader’s amended application. This decision was based on the unresolved issue regarding whether the Decedent intended to change his beneficiary designations for his life insurance benefits due to technical malfunctions in the benefits system. This has led to uncertainty about the distribution of the remaining Plan benefits. This action protects the Plaintiff-in-Interpleader from potential liability and ensures that the funds are distributed according to the Court’s determination.
ZALMA OPINION
When multiple parties claim the benefits of a life insurance policy and litigate against the insurer federal rules allow the insurer to deposit the proceeds of the life insurance policy into an interest bearing account under the control of the court and protects the interests of all the claimants and the insurer and gives the court time to determine which beneficiary and how much each are entitled to receive.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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ZIFL Volume 30, Number 2
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5260
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Contents of the January 15, 2026 Issue of ZIFL Includes:
Use of the Examination Under Oath to Defeat Fraud
The insurance Examination Under Oath (“EUO”) is a condition precedent to indemnity under a first party property insurance policy that allows an insurer ...
ERISA Life Policy Requires Active Employment to Order Increase in Benefits
Post 5259
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In Katherine Crow Albert Guidry, Individually And On Behalf Of The Estate Of Jason Paul Guidry v. Metropolitan Life Insurance Company, et al, Civil Action No. 25-18-SDD-RLB, United States District Court, M.D. Louisiana (January 7, 2026) Guidry brought suit to recover life insurance proceeds she alleges were wrongfully withheld following her husband’s death on January 9, 2024.
FACTUAL BACKGROUND
Jason Guidry was employed by Waste Management, which provided life insurance coverage through Metropolitan Life Insurance Company (“MetLife”). Plaintiff contends that after Jason’s death, the defendants (MetLife, Waste Management, and Life Insurance Company of North America (“LINA”)) engaged in conduct intended to confuse and ultimately deny her entitlement to...
Failure to Respond to Motion to Dismiss is Agreement to the Motion
Post 5259
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In Mercury Casualty Company v. Haiyan Xu, et al., No. 2:23-CV-2082 JCM (EJY), United States District Court, D. Nevada (January 6, 2026) Plaintiff Mercury Casualty Company (“plaintiff”) moved to dismiss. Defendant Haiyan Xu and Victoria Harbor Investments, LLC (collectively, “defendants”) did not respond.
This case revolves around an insurance coverage dispute when the parties could not be privately resolved, litigation was initiated in the Eighth Judicial District Court of Nevada. Plaintiff subsequently filed for a declaratory judgment in this court.
On or about April 15, 2025, the state court action was dismissed with prejudice pursuant to a stipulation following mediation. Plaintiff states that the state court dismissal renders its ...
Court Must Follow Judicial Precedent
Post 5252
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Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
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He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
